Knowledge Management as an Integral Part of HR Activities - Literature review Example

Knowledge Management Question # 6 : Knowledge Management Explore the concept of Knowledge Management as an integral part of HR activities and it’s capacity to add value to an organization’s operations. Provide a reasoned line of argument to convince top management in an organization (type/sector) of your choice to embrace Knowledge Management, and where possible draw on the context of your home country setting. i. Introduction The human resource functions were often perceived as “technophobic” and slow to adapt to the realities of the marketplace and only plays a secondary role in knowledge management. Today, human resources function has been changing and now have a significant role in the organization’s strategic development, and once that strategy is endorse, the human resources need to create strategies, policies, and procedures to fulfil the organizational mission and vision. Since knowledge is perceived as a critical commodity, the knowledge strategy of an organization is central to the new mandate for HR management. The Human Resource department can play a key role in sustaining growth by integrating performance through learning using Knowledge Management tools and techniques. This paper will explore the concept of Knowledge Management as an integral part of HR activities and its capacity to add value to an organization’s operation. This includes discussion on relevant issues in Knowledge Management and HR activities and application of Knowledge Management tools and techniques in the real world. ii. Concept of Knowledge Management “Knowledge is information that changes something or somebody—either by becoming grounds for actions, or by making an individual (or an institution) capable of different or more effective action (Peter F. Drucker, 1988)”- (Stankosky 2005, p.51) The above statement appears that ‘knowledge’ is information that has value, appropriate, current, and can help us attain our performance goals. However, information and knowledge is worthless unless they are unlocked with ‘action’. “Knowledge is interpreted in terms of potential for action”1 (Malhotra 2001, p.3). According to Stankosky (2005), referring to the works of Liebowitz (1999) and Wiig (1997), the active and dynamic implementation, and management of knowledge are essential to enable “organization performance enhancements, problem solving, decision-making, and teaching”2. Knowledge management identify the processes required to manage knowledge efficiently. It is methodical, precise, and planned development, regeneration, and use of knowledge to make the most of the enterprise’s knowledge-related effectiveness and benefits from its “knowledge assets”3. Stankosky (2005) also cited O’Dell (1996) who perceived Knowledge Management as an organized approach to discover, recognize, and utilize knowledge to create value4. On the other hand, the process and terminology linked with Knowledge Management seems theoretical, publicity, and merely a new “management verbiage”5 but it is real, sensible, and extremely significant6. Over the past years, many organizations focus its role in the enterprise value process in the assumption that to re-establish and maintain a competitive advantage in today’s business environment, an organization must capture and utilize all the knowledge and skills of its employees7. Knowledge work is a comparatively new and dynamic area of research that has materialized as a straightforward response to the shifting organizing process that permeates many modern-day organizations8 1 Yogesh Malhotra, 2001, Knowledge Management and Business Model Innovation, Published 2001 Idea Group Inc (IGI), ISBN 1878289985, p.3 2- 7 Michael Stankosky, 2005, Creating the Discipline of Knowledge Management, Published 2005 Elsevier, ISBN 075067878X, p.51 8 Mark Eaterby-Smith and Marjorie Lyles, 2003, The Blackwell Handbook of Organizational Learning and Knowledge Management, Published 2003 Blackwell Publishing, ISBN 0631226729, p.54 Knowledge ‘workers’ are therefore, Easterby-Smith and Lyles (2003) referring to Haymann and Elliman (2000), are people who improve given information and who learn from the information that is conveyed9. Consequently, knowledge and information are now the most significant resources that an organization can collect10. Moreover, because of the emphasis on communication and information in knowledge work, information and communication technologies (ICTs) have been intimately linked with the development of knowledge management projects11. However, Malhotra (2001) referring to IT-economist Paul Strassmann’s statement, argues that there is no relationship at all between computer expenditures and company performance. He also mentioned the case of Xerox Parc where despite of a $1 trillion investment on IT, observed that there is little improvement in the competence and efficacy of its knowledge workers. He added that the confusion between knowledge and information has caused managers to sink billion of dollars in IT investments that have “often yielded marginal results”12 (p.3). Although the terms ’information’ and ‘knowledge’ are often used interchangeably, there is an unambiguous distinction between information and knowledge. Nonaka and Takeuchi (1995) referring to the work of Bateson (1979), explains that information consists of “differences that make a difference”13 and information provides a new point of view for understanding the actions or objects, which makes previously 9 & 11 Mark Eaterby-Smith and Marjorie Lyles, 2003, The Blackwell Handbook of Organizational Learning and Knowledge Management, Published 2003 Blackwell Publishing, ISBN 0631226729, p.52 & 54 10 & 11 Michael Stankosky, 2005, Creating the Discipline of Knowledge Management, Published 2005 Elsevier, ISBN 075067878X, p.51 12 Yogesh Malhotra, 2001, Knowledge Management and Business Model Innovation, Published 2001 Idea Group Inc (IGI), ISBN 1878289985, p.3 13 Ikujiro Nonaka and Hirotaka Takeuchi, 1995, The Knowledge-Creating Company: How Japanese Companies Create the Dynamics, Published 1995 Oxford University Press US, ISBN 0195092694, p.58 imperceptible meanings perceptible or shed lights on unforeseen relations. Therefore, ‘information’ is an essential medium or material for extracting and building ‘knowledge’. It affects ‘knowledge’ by adding something to it or reorganizing it. It is a “commodity capable of yielding knowledge”14. In view of the various inconvenience arising from distinguishing ‘knowledge’ from ‘information’, getting the business world to focus on something other than data can be attributed to ‘knowledge management movement’15. As indicated by Davenport and Prusak (2000), knowledge management projects almost all the time include some blend of information and knowledge, and it is not easy to separate them. However, roughly, every organization can now differentiate between knowledge and data, and in some instances in which someone in an organization tried to include data in a knowledge repository and was denied16. Now, organizations are focusing on ‘human interaction’ as many businesses have promoted the establishment of social groups within their organizations to help encourage ‘knowledge flows’17. Through knowledge management, leaders conceivably grasped that technology does not have all the answers because the successful knowledge management in the large majority of organizations necessitate cultural and organizational change, as well as technological innovation. Although not 14 Ikujiro Nonaka and Hirotaka Takeuchi, 1995, The Knowledge-Creating Company: How Japanese Companies Create the Dynamics, Published 1995 Oxford University Press US, ISBN 0195092694, p.58 15, 16 & 17 Thomas Davenport and Laurence Prusak, 2000, Working Knowledge: How Organizations Manage What They Know, Published 2000 Harvard Business School Press, ISBN 0875846556, p.8 \all organizations that have implemented knowledge management made considerable progress in their quest for more ‘knowledge-friendly’ cultures and behaviours, they are at least mindful of the barriers and trying to manoeuvre in the correct path18. However, the challenge is linking knowledge to business strategy to enhance the proficiency or effectiveness of individual departments or business processes. iii. HR and Knowledge Management HR principles nowadays take into account the evolving role of the human resource department in the midst of substantial structural and cultural changes that have affected the business world. In an age of reengineering, restructuring, reorganizing, downsizing, rightsizing, and the like, some of the traditional ideas about work and it relationship to the HR department are relatively dissimilar from the past. For instance, the first principle, which asserts the values of a company’s ‘knowledge capital’, is related predominantly to its employees. From this angle, organizations realize that the true value of their operations rest in the knowledge capital which is concealed in employees’ minds and needs to be developed over time19. Now, HR has become strategic than”a cost of doing business”20 and many older HR applications have been changed by integrated HR packages like SAP HR and Peoplesoft. These packages allow the creation of large databases of employee information that save money and can assist the whole organization function more efficiently. In turn, this information can be turned into knowledge to help in creating 18 Thomas Davenport and Laurence Prusak, 2000, Working Knowledge: How Organizations Manage What They Know, Published 2000 Harvard Business School Press, ISBN 0875846556, p.9 19 & 20 Robert Thierauf, 1999, Knowledge Management Systems for Business, Published 1999 Quorum/Greenwood, ISBN 1567202187, p.322 the HR department a genuine strategic unit of a conventional organization21. Supporting the same view is Hopkins and Markham (2003) who believes that the “reactive” and “a drain in business” image of traditional HR have been replaced by a more positive perception. The strategic value of HR is now recognized as “tool for competitive advantage”22. e-HR helps the organization in numerous ways such as the ability to learn quicker and applying knowledge more rapidly. Assist the organization obtain unique abilities that cannot be duplicated and optimize interaction among various functions inside the organization. More significantly, it enhances customer service by becoming more adaptable and reactive to changes in the market place23. Since increasingly more people are being depicted as ‘knowledge workers’, their usefulness is conditional on what they know and how they use that knowledge. The principles of synergy tell us that the “whole is greater than the sum of its parts”24, however taking all of the different elements of an organization’s knowledge together into a coherent whole has generally proved very complicated. This is somehow true since according to Little and Ray (2005) “traditional approaches for knowledge management rest on the pipeline metaphor” that has a limited flow (p.212). There are normally complications in disseminating knowledge and information along with the cultural oppositions connected with persuading people to share what they know. However, although intranet technology cannot do very much 21 Robert Thierauf, 1999, Knowledge Management Systems for Business, Published 1999 Quorum/Greenwood, ISBN 1567202187, p.322 22, 23 & 24 Bryan Hopkins and James Markham, 2003, E-Hr: Using Intranets to Improve the Effectiveness of Your People, Published 2003 Gower Publishing, Ltd, ISBN 0566085399, p.11 & 57 about cultural challenges, “it can surely provide a means by which knowledge and information can be disseminated more effectively”25. According to Armstrong (2003), the goal is to achieve a human capital advantage by utilizing individuals with competitively indispensable knowledge and skills. This means developing the “organization’s intellectual capital”26, coming from the collected stockpile of knowledge, talent, and abilities that individuals possess that the organization has developed overtime as “identifiable expertise”27. This goal is possible through knowledge management, recruiting and human resource development processes. As we mentioned earlier, knowledge management is concerned with shaping the ways in which individuals store and share the wisdom and understanding collected in an organization about its practices, performance, and undertakings. It is therefore essential to draw and preserve the skilled, experienced, dedicated, and motivated employees the organization needs. This is in accordance with a primary strategic of HRM to help in the creation of firms, which are sharper and flexible that their rival by appointing and developing more staff that are competent. Organizational success depends on the capacity of employees, including better performance, efficiency, flexibility, innovation, and the skill to deliver high levels of customer service28. Augmenting the competence and potential of individuals by providing knowledge and constant development opportunities is indispensable thus making certain that each individual in the organization has the 25 Bryan Hopkins and James Markham, 2003, E-Hr: Using Intranets to Improve the Effectiveness of Your People, Published 2003 Gower Publishing, Ltd, ISBN 0566085399, p.57 26, 27, & 28 Michael Armstrong, 2003, A Handbook of Human Resource Management Practice, Published 2003 Kogan Page, ISBN 0749441054. p.7 knowledge and skills and achieving the level of proficiency necessary to perform their work efficiently is critical29. “Knowledge management is more about people than technology”30 referring to Davenport (1996). HR therefore can make momentous contribution to knowledge management because knowledge is shared between people; it is not just a matter of capturing explicit knowledge using information technology. The role of HR is to make certain that the organization has the intellectual capital it needs, as Armstrong (2003), using the word of Capelli and Crocker-Hefter (1996), that “distinctive human resource practices help to create unique competencies that differentiate products and services and, in turn, drive competitiveness”31. The various ways in which HR can contribute to organizational growth through knowledge management, includes development of open culture in which the values and models stress the significance of sharing knowledge. HR can promote an atmosphere of loyalty and trust. Inform on the design and development of organizations, which make possible knowledge sharing through networks and communities of practice, and collaboration. Lend a hand on in the conception of policies and provide recruiting services that will make sure that value employees who have the capability are attracted and retained. Recommend methods of motivating people to share knowledge and compensate those that deserve them. Participate in the development of performance management processes, which focus on the development and sharing of knowledge. Internally, develop processes of organization and individual learning, which will generate 29, 30 , & 31 Michael Armstrong, 2003, A Handbook of Human Resource Management Practice, Published 2003 Kogan Page, ISBN 0749441054. p.7 , p.166, & p.167 and assist in disseminating knowledge. Organizing workshops, conferences, seminars, and conventions, which facilitate knowledge to be shared on a person-to-person basis. In relation to IT, develop systems for acquiring and codifying explicit and implicit knowledge. Finally, support the cause of knowledge management with senior managers to persuade them to put forth leadership and support knowledge management projects32. “Knowledge management needs to be viewed strategically by the business because of the potential impact on the bottom line”33. Lawler and Mohrman (2003) maintains that in the correlation between HR function and the company’s business strategy and change initiatives, the most important thing is the extent in which an organizations knowledge and information–based strategies and initiatives is correlated to proficiency and knowledge management34. In contrast are the companies whose strategies and initiatives are focused on growth, business portfolio changes such as concentrating on core business and restructuring which the HR function is less likely to help35. For instance, companies that think about HR as a full partner have a bigger emphasis on knowledge and information-based strategies than on growth or portfolio-restructuring strategies. In general, an emphasis on knowledge, competencies, and human capital appears to generate a much more positive situation for the HR function because it places a premium on obtaining, developing, employing, and preserving talent. 32 Michael Armstrong, 2003, A Handbook of Human Resource Management Practice, Published 2003 Kogan Page, ISBN 0749441054. p.167 33 Christina Evans, 2003, Managing for Knowledge: HR's Strategic Role, Published 2003 Elsevier, ISBN 0750655666, p.20 34 & 35 Edward Lawler and Susan Albers Mohrman, 2003, Creating a Strategic Human Resources Organization: An Assessment of Trends, Published 2003 Stanford University Press, ISBN 0804747024, p.107 & p.157 In a survey conducted by Mertins et. al. (2003), 55% of the respondent companies value knowledge management as a part of corporate traditions that supports the dynamic exchange of information, knowledge, and practices between employees and departments36. In the significance of knowledge management in business processes, 74.5% perceive it as a means to attain company goals such as an increase of customer satisfaction and improvement of pioneering capability; enhance product quality, and lessening of costs37. Indeed, strategic capability requires a firm to be able to create and disseminate knowledge among its employees and often its customer, suppliers, and firms that make complementary products as well. However, according to Burke and Cooper (2005), the “new knowledge must lead to new behaviours if it is to create strategic capability” for the organization38. HR must help organization strike a balance between productively focusing efforts on essential tasks while constantly incorporating new ideas since “knowledge management and human capital stewardship inevitably are intertwined”39. Aware of knowledge management capabilities, HR needs to “orchestrate and complicated dance”40 involving mastery and collective artistry as “knowledge management is not teaching people what they need to know but ensuring that people know how to learn”41. 36 & 37 Kai Mertins, Heisig Peter, Vorbeck Jens, 2003, Knowledge Management: Concepts and Best Practices, Published 2003 Springer, ISBN 3540004904, p.3 & p.4 38-41 Ronald Burke and Cary Cooper, 2005, Reinventing Human Resource Management: Challenges and New Directions, Published 2005 Routledge, ISBN 0415319625, p.46 iv. Knowledge Management in the Construction Industry The construction industry presents an “extremely challenging context for exchanging knowledge, as information must flow across both project and professional interfaces”42. Developing tailored approaches demands the support of appropriate HRM procedures to make certain a culture within which people liberally communicate and exchange information in return for mutual action from their contemporaries. The HRM function has a vital role to play in the development of such an amenable knowledge-sharing environment within huge organizations, as it can help to fashion the cultural framework essential for communities of practice to develop within them. The challenge for the construction industry, however, is to identify the HRM methodology, which support knowledge sharing within its dynamic workplace environment. Construction projects, being characterized by short-range involvement, specialist functional roles, and intense competition requires an effective knowledge management strategy critical for securing competitive advantage43. Take for example the case of Carillion PLC using Sigma Connect. Sigma Connect was introduced to Carillion PLC (a company formed in 1999 through the demerger of the Tarmac group of companies) as part of its knowledge management strategy. Carillion is now focussed on the business and construction services industry with a turnover of 2 billion Euros and over 20,000 employees. Since the construction industry is rapidly changing and driven by both commercial and public demands for sustainability, safety, and quality, Carillion business is also changing, moving away from straight development projects lasting two to three years, to longer service-based 42 & 43Abdul Samad Kazi, 2005, Knowledge Management in the Construction Industry: A Socio-technical Perspective, Published 2005 Idea Group Inc (IGI), ISBN 159140360X, p.25 & 32 project that not only include the initial construction but facilities management, maintenance, and servicing. Sigma Connect was deployed within Schal, a subsidiary of Carillion. The pilot was used to recognize the potential barriers for advancing Sigma Connect’s utilization across Carillion. Surprisingly, cultural barriers were extremely uncommon and remote to a very restricted number of individuals and in fact, most workers sought to endorse what they knew and locate others that could help them bring better result for their projects44. Carillion views Sigma Connect as an indispensable part of the knowledge management jigsaw puzzle. Although they do not consider it as a solution in its own right, but it plays a momentous role along with what they term their “Knowledge Forum”, “Knowledge and Innovation network”, and “Best Practice Programmes”45. The main business drive for implementing Sigma Connect and introducing knowledge management into Carillion is the very nature of the modern construction industry being a highly competitive, high risk, with low margins. Therefore, in order to succeed in this environment, a business has to be sharper, more efficient, and constantly using its knowledge assets to get it right the first time and avoid repeated mistakes. Their knowledge management initiatives are to avoid people making costly mistakes. Before the implementation of Sigma Connect, Carillion people relied on talking to people they knew which was limited by the size of their own informal networks. Sigma Connect opened up those networks, remove the natural boundaries 44 & 45Abdul Samad Kazi, 2005, Knowledge Management in the Construction Industry: A Socio-technical Perspective, Published 2005 Idea Group Inc (IGI), ISBN 159140360X, p.121 & p.122 of location, functional structure, and cultural background to create an environment that welcomes sharing and fosters innovation46. Awareness of the importance of knowledge management in the construction industry has now achieved the level where it is only normal for potential suppliers of major projects to be asked what their knowledge management strategy is. A good knowledge management strategy not only impressed clients but also produce additional incentive for employees to ensure their information is up to date within the system47. Carillion is a good example of how organizations can take advantage of knowledge management to avoid costly and repeated mistakes by building a competent workforce who knows “how to learn” and “share” their knowledge. 46 47 Abdul Samad Kazi, 2005, Knowledge Management in the Construction Industry: A Socio-technical Perspective, Published 2005 Idea Group Inc (IGI), ISBN 159140360X, p.122 v. Conclusion Away from the old practice, modern HR now takes into account its role in the massive and structural changes occurring in the business world. Since organizations now realized the true value of their operations lie in the “knowledge capital”, HR has become strategic unit of a typical organization. The strategic value of HR is a tool for competitive advantage since it can help the organization in acquiring distinct abilities that cannot be imitated and improve customer service by becoming more flexible and responsive to the changes in the marketplace. In general, the goal is to achieve a human capital advantage by employing people with competitively valuable knowledge and skills, an “organizational intellectual capital” coming from the collected stock of knowledge, skills, and abilities of employees. Moreover, since knowledge management can influence the ways in which people store and share the wisdom and understanding accumulated in an organization about its processes, techniques, and operations, every organization should consider its advantage. Finally, being central to the creation of policies and procedures, and “intellectual capital” of an organization, HR should sustain, improve, and align its knowledge management skills to the ever-changing business environment and business strategies. vi. Bibliography ARMSTRONG Michael, 2003, A Handbook of Human Resource Management Practice, Published 2003 Kogan Page, ISBN 0749441054 BURKE Ronald and COOPER Cary, 2005, Reinventing Human Resource Management: Challenges and New Directions, Published 2005 Routledge, ISBN 0415319625 DAVENPORT Thomas and PRUSAK Laurence, 2000, Working Knowledge: How Organizations Manage What They Know, Published 2000 Harvard Business School Press, ISBN 0875846556 EASTERBY-SMITH Mark and LYLES Marjorie, 2003, The Blackwell Handbook of Organizational Learning and Knowledge Management, Published 2003 Blackwell Publishing, ISBN 0631226729 EVANS Christina, 2003, Managing for Knowledge: HR's Strategic Role, Published 2003 Elsevier, ISBN 0750655666 HOPKINS Bryan and MARKHAM James, 2003, E-Hr: Using Intranets to Improve the Effectiveness of Your People, Published 2003 Gower Publishing, Ltd, ISBN 0566085399 KAZI Abdul Samad, 2005, Knowledge Management in the Construction Industry: A Socio-technical Perspective, Published 2005 Idea Group Inc (IGI), ISBN 159140360X LAWLER Edward and MOHRMAN Susan Albers, 2003, Creating a Strategic Human Resources Organization: An Assessment of Trends, Published 2003 Stanford University Press, ISBN 0804747024 LITTLE Stephen and RAY Tim, 2005, Managing Knowledge: An Essential Reader, Published 2005 SAGE, ISBN 1412912415 MALHOTRA Yogesh, 2001, Knowledge Management and Business Model Innovation, Published 2001 Idea Group Inc (IGI), ISBN 1878289985 MERTINS Kai, Heisig Peter, Vorbeck Jens, 2003, Knowledge Management: Concepts and Best Practices, Published 2003 Springer, ISBN 3540004904 NONAKA Ikujiro and TAKEUCHI Hirotaka, 1995, The Knowledge-Creating Company: How Japanese Companies Create the Dynamics, Published 1995 Oxford University Press US, ISBN 0195092694 STANKOSKY Michael, 2005, Creating the Discipline of Knowledge Management, Published 2005 Elsevier, ISBN 075067878X THIERAUF Robert J., 1999, Knowledge Management Systems for Business, Published 1999 Quorum/Greenwood, ISBN 1567202187         Read More